Press. voanews.com
Tokyo-based
cryptocurrency exchange Coincheck Inc said Sunday it would return about 46.3
billion yen ($425 million) of the virtual money it lost to hackers two days ago
in one of the biggest-ever thefts of digital money. That amounts to nearly 90
percent of the 58 billion yen worth of NEM coins the company lost in an attack
Friday that forced it to suspend withdrawals of all cryptocurrencies except
bitcoin. Coincheck said in a statement it would repay the roughly 260,000
owners of NEM coins in Japanese yen, though it was still working on timing and
method.
Theft and
security
The theft
underscores security and regulatory concerns about bitcoin and other virtual
currencies even as a global boom in them shows little signs of fizzling. Two
sources with direct knowledge of the matter said Japan’s Financial Services
Agency (FSA) sent a notice to the country’s roughly 30 firms that operate
virtual currency exchanges to warn of further possible cyber-attacks, urging
them to step up security.
The financial
watchdog is also considering administrative punishment for Coincheck under the
financial settlements law, one of the sources said. Japan started to require
cryptocurrency exchange operators to register with the government in April
2017. Pre-existing operators such as Coincheck have been allowed to continue
offering services while awaiting approval. Coincheck’s application, submitted
in September, is still pending.
Coincheck told a
late-Friday news conference that its NEM coins were stored in a “hot wallet”
instead of the more secure “cold wallet,” outside the internet. Asked why,
company President Koichiro Wada cited technical difficulties and a shortage of
staff capable of dealing with them.
Shades of Mt. Gox
In 2014,
Tokyo-based Mt. Gox, which once handled 80 percent of the world’s bitcoin
trades, filed for bankruptcy after losing around half a billion dollars worth
of bitcoins. More recently, South Korean cryptocurrency exchange Youbit last
month shut down and filed for bankruptcy after being hacked twice last year. World
leaders meeting in Davos last week issued fresh warnings about the dangers of
cryptocurrencies, with U.S. Treasury Secretary Steven Mnuchin relating
Washington’s concern about the money being used for illicit activity.